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Sunday, September 21, 2014         

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Health care reform will lower costs and improve care


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When asked why he robbed banks, Willie Sutton answered, “Because that’s where the money is.”

Nobel Prize-winning economist Paul Krugman suggests that politicians are “anti-Willie Sutton” when they reduce discretionary spending to balance the budget. By contrast, he argues, President Barack Obama’s reform of health care is on target because that’s where the money is.

Krugman is correct. We spend almost 20 percent of our gross domestic product on health care; if nothing is done it will soon equal half of all we spend. There are savings to be found. Health care needs reform.

To solve this problem, it’s useful to carry the Willie Sutton metaphor further, by examining where health care costs are generated. While the easy target is health insurers, several studies have connected runaway health care costs to two specific problems with health care delivery:

>> Medical errors. The Institute of Medicine (IOM), the health arm of the National Academy of Sciences, estimated that 44,000 Americans died in 1997 as a result of medical errors that occurred in a hospital, resulting in increased health care costs of *$8 billion to $15 billion. In 2008, it was estimated at $18 billion. Health care providers are highly trained but human, and humans err. We have learned in other industries that systematic quality-control procedures can reduce human error.

>> Overuse of services. The Dartmouth Atlas studies and the IOM indicate that as much as

30 percent of care we receive is unnecessary, including diagnostic procedures such as CT scans, surgical procedures and chemotherapeutic treatment of cancers.

Overuse is driven by perverse cycles of economic incentives. Media ads and reports exaggerate the value of medications and medical services, feeding patient demand for unneeded care. Providers accede to patient demand because they are paid for providing services — whether or not they have any value. Compounding this is the threat of a malpractice suit, an excuse for doing too much.

While overuse is primarily a physician challenge, hospitals, that depend on these procedures to maintain their profit margins do little to discourage it.

The Health Care reform law contains needed solutions:

>> Restructure health insurance benefits. Insurers will be required to offer preventive services without a co-payment, encouraging early care that can curtail high-cost chronic illnesses. A corresponding system of variable co-payments will discourage the use of services with little or no value.

>> Remove financial incentives for providing unneeded services. The present fee-for-service system that encourages the overuse of services will disappear and reimbursements will be increasingly dependent on the quality of the services they provide. Also, hospitals will have to assume responsibility for costs resulting from avoidable complications.

>> Institute strict evidence-based quality-control procedures in hospitals and physician offices. In the future, electronic health records and evidence-based standards will provide physicians and patients real-time, evidence-based standards to guide their decisions and insurers will have mechanisms to determine if the provider actually used the standards.

Another much-needed change is cultural and can’t be legislated. We must make the inevitability of death a part of our decision-making so that the last days of life become more loving and comfortable and less brutal and costly. Care directed at helping patients through this difficult period is called palliative care. There is scientific evidence that when palliative care accompanies curative care, patients have a better quality of life and live longer than when they receive curative care alone.

These changes are all essential parts of health care reform, and while the oft-stated benefit is cost control, the non-financial returns — better quality care that is patient-directed — make reform imperative.

———

On vacation

“On Politics” columnist Richard Borreca is on vacation.






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